Are Middle Eastern Current Account Imbalances Excessive?

August 1, 2011

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Format: Chicago

Paul Cashin, and Samya Beidas-Strom. Are Middle Eastern Current Account Imbalances Excessive?, (USA: International Monetary Fund, 2011) accessed December 3, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Employing a dynamic panel regression, this study estimates the medium-term current account position for three subgroups of emerging market and developing countries with shared economic characteristics. The fundamental determinants of the macroeconomic balance approach to current account determination (arising from the IMF's Consultative Group on Exchange Rate (CGER)) are augmented by determinants relevant to Middle Eastern economies' current account positions. The study also assesses the deviation of the actual medium-term current account position of three Middle Eastern subgroups of countries (emerging markets; low-income and fragile economies; and net oil exporters) from their medium-term current account norms. Key findings are that: augmentation of the fundamental determinants yields plausible Middle Eastern current account norms; and in comparison with the medium-term current account norm, the actual and projected current account imbalances of each of the three subgroups are typically not excessive.

Subject: Balance of payments, Commodities, Current account, Fiscal policy, Fiscal stance, Foreign direct investment, Foreign exchange, Oil, Real effective exchange rates

Keywords: CA balance, CA deficit, CA norm, CA surplus, Current account, Current account determination, Fiscal stance, Foreign direct investment, Global, Macroeconomic balance approach, Middle East, Norm estimation, Oil, Oil exporter, Real effective exchange rates, Terms of trade, WP

Publication Details

Pages:

55
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2011/195
Stock No:

WPIEA2011195
ISBN:

9781462305247
ISSN:

1018-5941

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